Program Growth. Colorado s Industrial Hemp Program. Colorado Counties Incorporated. Nov 20 th, 2017
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1 Program Growth Colorado s Industrial Hemp Program Year The Regulatory Registered Program Land Area and Industry Harvest Status Nov 20 th, 2017 Colorado Counties Incorporated
2 What is Industrial Hemp? Federal Farm Bill Definition The term industrial hemp means the plant Cannabis sativa L. and any part of such plant, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis. If it is over 0.3% delta-9 THC concentration it is marijuana and it is not Industrial Hemp. And if it is not grown in a regulated system, federally or in CO, it is not Industrial Hemp no matter what the THC is.
3 So what does hemp look like?
4 So what does hemp look like?
5 So what does hemp look like?
6 How can I tell marijuana from Industrial Hemp? Visually they look the same because they are the same genus and species of plant. The only difference is the level of delta-9 THC concentration which can only be determined through laboratory analysis. You just can t get high from hemp.
7 Who set 0.3% as the THC limit? UN Office on Drugs and Crime and most international trade agreements generally recognized a limit of 0.3% THC. Canada and Australia use 0.3% THC. Much of the European Union uses 0.2% THC. The 2014 Farm Bill uses 0.3% THC. And in Colorado the voters defined Industrial Hemp as 0.3% THC concentration and below in the Constitution. It wasn t the CDA and we have NO authority to change it.
8 If you can t get high what is industrial hemp good for? The Congressional Research Committee estimates that there are more than 25,000 uses for industrial hemp. Those uses include paper, textiles, biofuels, graphene for high capacity batteries, car parts, insulation and building products, cosmetic and body care products, dietary supplements and food products, CBD.
9 How has the market developed? $ Imported Grain Fiber Congressional Research Committee- Hemp as an Agricultural Commodity 3/10/17
10 Domestic Production in US (& CO) Domestic production continues to increase as more states provide regulatory structures for and more processors begin to enter the market acres(200) less than 300,000 sqft (270,000) acres (2200).6 million sqft (570,000) acres (5700) 1.6 million sqft (1.2) acres (9800) 2.2 million sqft (2.1) Until 2017, CO has accounted for more than 50% of all US hemp production every year since it was authorized in 2014.
11 What changes have we seen in the industry? In 2014 we saw mostly small outdoor operations, limited agronomic expertise, most growers were under capitalized and a significant number registered purely for a historic certificate with no intent to plant. We are seeing a shift in the industry. Outdoor production space has increased significantly and indoor space registered exploded. The size of individual growing sites increased and has moved to traditional agricultural production areas. Agronomic practices have improved. Businesses are better funded and production plans are better developed. More investors and processors are entering the market.
12 An Industry Still Emerging In 2014 almost all plantings were one acre or less. Anything over 5 acres was considered a large planting. Today almost half the registered land areas are over 5 acres and almost 20% of the registrations are for 50 acres or more. Individually 10 registrants have more acres registered in 2017 than all registrants combined grew in The two largest producers registered more acres than all states combined harvested in 2015.
13 Where in CO is hemp cultivated? Industrial hemp is a matter is statewide concern so the CDA will issue registrations anywhere in the state. It is broadly distributed across the state. Currently 51 of Colorado s 64 counties have at least one registered land area. Weld county currently has the most registrations followed by Delta, Larimer, Mesa, and Boulder.
14 Where it is being grown in CO 70 numreg/county numreg/county Bent Gilpin Las Animas Moffat Ouray Phillips Summit Teller Cheyenne Denver Grand Kit Carson Pitkin Archuleta Conejos Morgan Prowers San Miguel Washington Broomfield Custer Logan Rio Grande Arapahoe Montezuma Park Huerfano Routt Douglas Baca Chaffee Elbert Yuma Adams Jefferson La Plata Costilla Saguache Garfield Fremont Pueblo El Paso Alamosa Otero Montrose Boulder Mesa Larimer Delta Weld
15
16 Emerging Segments of the Industry Colorado, like most states since, have seen the CBD segment of the industry emerge the fastest. Initially CBD probably represented over 60% of the acres planted. Today that percent is significantly lower. While CBD planting remains an important segment of the industry, planted acres for grain now far outweigh the total acres of CBD planted and growth rate for new land areas dedicated to grain production are the fastest growing segment of Colorado s hemp industry today.
17 The role of the CO Dept. of Agriculture The CDA grants commercial and research & development registrations on specific land areas for the cultivation of industrial hemp within CO. It is a voluntary program. Land areas not registered with the program are not protected by this program from local, state or federal agencies. We inspect and sample cannabis growing on registered land to verify compliance. While we work with the industry to understand the issues involved with this emerging industry we have no jurisdiction over processing or products containing industrial hemp. That does not mean no one regulates these processes. Other state or local regulations may apply.
18 Why is it important to understand the total Cannabis landscape? It is required to obtain a registration to cultivate industrial hemp under the Farm Bill. In Colorado Constitutionally you can grow six marijuana plants. The only place in Colorado where you can not grow marijuana is a land area voluntarily registered to grown industrial hemp. That makes registering a land area and not the individual critical to our program. That also means Colorado has a little different relationship with some of our federal partners, including the DEA, because of our Cannabis landscape.
19 Purposeful Rules Why are the Rules so important for a program? Ensure compliance with federal guidelines in the Cole Memorandum and comply with the 2014 Farm Bill. Ensure that all registrants in have a level playing field in the market. Ensure that those that violate the rules don t benefit from doing so. Ensure that those that abuse the system are denied access to the protections the program offers so they don t jeopardize the program for those that follow the Rules.
20 How does the program work? The program has 3 key components: 1)Registration -who is involved and where is it being grown 2)Reports-Pre-Planting, Planting and Harvest 3)Inspection and Sampling- Risk and Random based selection There are only 8 pages of Rules.
21 Inspection and Sampling: All registrations are subject to inspection and sampling either scheduled or without notice. All land and buildings within the registered land area are subject to inspection. All Cannabis plants within the registered land area are subject to sampling. Registrants wishing to close a registration early are subject to sampling. The provisions are designed to protect public safety.
22 What we sample and how. The Dept. samples within 30 days of harvest. We avoid sampling the outside edges of the field but allow our inspectors to use their judgement on where to select. We sample only female plants. We sample the female flower when it is present but for material being grown for biomass and harvested before flowering we select the top two inches of the plant. The sample size is reflective of the crop size; ½ oz. for individual plants, small plots with less than 100 plants the target is 3oz with a minimum of 1oz, larger plots but less than an acre the target is 8 oz. with a 3 oz. minimum and for multi acre plots the minimum amount is 8 oz.
23 What have testing results looked like? In % of the samples taken exceeded the 0.3% THC threshold. The quantity of material however was very limited and nothing found was highly intoxicating. In 2015 and 2016 those compliance rates continued to improve slightly each year and growers began sorting out those varieties that were failing. In 2016, 1232 acres were destroyed for exceeding the THC limit. 78% or 957 acres that failed were in three varieties compliance rates are above 91%. The number of acres exceeding 0.3% THC is also lower, less than 800 acres. Most of the acres exceeding the THC limit in 2017 are in two varieties; one a recurring problem variety from 2016 (Colorado Gold) and one new variety (Marquis M-1) not previously seen or sampled in CO. Less than 1% of the planted acres would have failed if it were not for these two varieties.
24 What happens if the crop exceeds 0.3% THC? In CO a waiver from civil penalties can be requested for material that is above 0.3% but below 1.0% if the material is destroyed on site in a manner approved by the Commissioner. Material above 1.0% may be subject to civil penalties and must be destroyed on site in a manner approved by the Commissioner. In either case it can not be transported, used for human consumption or enter the stream of commerce. If the crop exceeds 0.3% it is no longer industrial hemp and could be subject to criminal prosecution as an illegal marijuana grow. Law enforcement may be notified in either case.
25 The CDA Approved Certification Process The process includes four parts. 1) Application including eligibility documentation. (CDA & CSU) 2) THC Testing for variety approval. (CDA) 3) Certified Seed Production from Registered or Foundation seed. (CSU/CSGA according to A0SCA Rules) 4) Labeling requirements. (CDA/ CSU/CSGA) It is more than a variety list it is a production system to insure breeders investments are protected and farmers get seed that will produce mature plants with a THC below 0.3%.
26 Issues the industry is facing Changing federal tides and lack of clarity and uniformity at the federal level. Different state regulations and interpretations of the Farm Bill. A developing identity crisis is emerging; division in the industry. System gamers (delaying harvest, MJ plantings). The can t catch us all non-registering growers. The blurring of the MJ line. Local law enforcement becoming increasingly involved.
27 Lack of Uniform Federal Interpretation of the Farm Bill Bureau of Reclamation doesn t allow the use of colored water. The USDA seed lab won t enforce the Federal Seed Act resulting in the U.S. becoming a dumping ground for low quality certified seed from other countries. USDA will authorize phytosanitary certificates for export. The DEA says you can t export. DEA, FDA, & USDA s Statement of Principles.
28 Shipping Across State Lines? It is implied but not explicitly clear if processed products can ship across state lines. The federal OMNIBUS spending bill passed in Dec of 2015 would IMPLY that the DEA could not prevent the transport using funds provided in that spending bill. What about other funds at the DEA s disposal? What about another state s rights? Legal questions surrounding CBD. It was not addressed in the Farm Bill and is considered a Schedule I drug by the DEA.
29 State Interpretations of the Farm Bill Pilot program means a pilot program to study the growth, cultivation or marketing of industrial hemp.. (i)ensures that only institutions of higher education and State dept. of agriculture are used to grow (ii) requires that sites used for growing industrial hemp be certified by, and registered with, State dept.of agriculture
30 An Industry Searching for Identity Unregistered grow sites, intentionally delayed harvests, marijuana planted inside registered land areas and attempts to blur the lines between industrial hemp and marijuana are beginning to have a negative impact on the emergence of the industry. Local law enforcement and regional drug task forces are becoming more active as a result. The DEA s position is also evolving. The industry is at a critical point between those that view hemp as an agricultural crop and those that see it as a stepping stone to a broader Cannabis discussion and industry.
31 Will hemp be a viable industry in CO? It is still very unclear where the industry will be in five or ten years. What does seem relatively certain is that some part of the industry will be a part of the agricultural landscape of the state. There are already more acres of industrial hemp registered than acres of Rocky Ford cantaloupe, Palisade peaches or pinto beans in CO. Will it be as big as corn or alfalfa, highly unlikely. However the lower water requirement has been a significant reason a number of corn farmers are exploring hemp as a way to reduce their water consumption.
32 Questions
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